By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!
Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.
Let’s start with the politics.
It is Friday the 13th and the world economy still exists. Financial Armageddon has been avoided for another week. Peacenik feels a generalized sense of anxiety as Peacenik surveys the financial press. Krugman has a sick feeling in the pit of his stomach as he contemplates the stimulus and the economy. Peacenik is beginning to think that minus some Black Swan event, everything will just unravel, slowly. Just like all of George Bush's efforts were to prevent a total collapse until he was out of office, Obama's efforts will delay the end. Buy time. Hope for the best. But the psychology is locked in. Peacenik doesn't think the public thinks the good old days are coming back. Peacenik thinks more and more people are agreeing with Peacenik. And that is a very worrisome development, on Friday the 13th. Have a good weekend.
